California DWC and IRS Announce Mid-Year Mileage Reimbursement Increase Effective

In response to the recent surges in the price of fuel across the nation, both the Internal Revenue Service (IRS) and the California Division of Workers’ Compensation (DWC) have officially implemented mid-year rate adjustments. Effective July 1, 2026, the mileage reimbursement rate for medical and medical-legal travel expenses in California has risen by another 3.5 cents, bringing the total rate to 76 cents per mile.

This adjustment directly impacts injured workers, employers, insurance claims administrators, and other personnel across California’s workers’ compensation system.

View historical mileage rates here: Mileage Rates (2016-2026)

Key Drivers Behind the Mid-Year Rate Change

Under California law—specifically Labor Code section 4600, Government Code section 19820, and California Department of Human Resources regulations—the DWC’s rate for medical and medical-legal travel reimbursement is legally bound to the standard business mileage rate set by the IRS.

On July 13, 2026, the IRS released Bulletin IR-2026-29 and Announcement 2026-11, modifying Notice 2026-10. Due to notable spikes in fuel prices, the IRS revised its optional standard mileage rates for computing deductible vehicle operating costs:

• Business Travel: Increased to 76 cents per mile.

The revised IRS rates apply to transportation expenses paid or incurred on or after July 1, 2026, as well as mileage allowances paid to employees on or after July 1 for transportation occurring on or after that date. Expenses or allowances paid prior to July 1, 2026, remain under the previous rate schedule outlined in Notice 2026-10.

Application to California Workers’ Compensation Claims

The California Department of Industrial Relations’ Division of Workers’ Compensation monitors claim administration and provides judicial services to resolve disputed claims. Following the IRS announcement, the DWC confirmed that the new 76 cents per mile rate must be paid for all qualified travel occurring on or after July 1, 2026.

Importantly, this updated reimbursement rate applies regardless of the original date of injury. Whether an injured worker is traveling for medical treatment or medical-legal evaluations related to a recent claim or an older case, any compensable travel undertaken on or after July 1 must be reimbursed at the new 76-cent rate.

Claims administrators and payroll managers should immediately update their expense software to ensure full compliance with the July 1, 2026 increase.

Downloadable Forms

Injured workers and claims personnel can access updated reimbursement forms directly through the DWC state portal here:

Download DWC medical mileage expense form (BY YEAR)

RESOURCES:

• Internal Revenue Service: Internal Revenue Bulletin: 2026-29
• CA Department of Industrial Relations: DWC increases mileage reimbursement rate for medical and medical-legal travel expenses